Sunday, July 6, 2014

The Economist asks: What explains Argentinian culture? More specifically,
what explains a culture that values:

… the
exercise of a kind of teenage narcissism in which it is fine to break rules you
don’t like, in the belief that you will get away with it.And if
you don’t, well, it’s unfair because the world is against you. There is an
Argentine term that captures at least part of this mindset: viveza
criolla, or “native cunning”.

The principle has defined Argentinian policy under the rule
of Nestor and Christina Kirchner:

The
notion that Argentina could play by its own rules, rather than by those of
economics or the rest of the world, was symbolised in the government’s denial
of the inflationary impact of its expansionary policies by fiddling the
consumer-price index. Meanwhile, the Kirchners heaped blame on the IMF for all
the country’s problems.

And, of course, the Argentinian way applies to the way the
nation has dealt with its “defaulted” bonds:

A
certain solipsism applies, too, to the government’s handling of its row with
its “holdout” bondholders, which has now brought the country to the brink of
default for the second time in a dozen years. Certainly, Argentina had little
choice but to restructure its debts to bondholders—many of whom had been
handsomely rewarded for the risk of default—after the economy collapsed in
2001-02.

Yet
nine years after a first restructuring deal, which inflicted a big write-down
on bondholders, Argentina finds itself in a tight spot. The refusal last month
of the United States Supreme Court to hear its appeal against a lower-court
ruling in New York that it must pay in full the 8% of bondholders who refused
both the 2005 bond swap and a second one in 2010 means that it has no practical
alternative but to negotiate with these holdouts. The lower court on June 27th
ruled that in the absence of a settlement with the holdouts, Argentina’s
deposit of $539m in a trustee’s account in order to make a scheduled payment on
its restructured bonds was “illegal”.

To answer the question: what accounts for this strange
Argentinian cultural trait? Why does this nation believe that rules are there
to be broken?

The answer, as I have suggested in previous posts, is that
Argentina is probably the most psychoanalyzed nation in the world. For decades
Freudian psychoanalysis has ruled Argentinian culture. There it still maintains
a prestige that it has lost in other nations. It is reasonable to believe that
everyone who is anyone in Argentina has spent some time on a psychoanalyst’s
couch.

Those who have read my new book The Last Psychoanalyst will recognize that a Freudian culture
teaches people to sin with impunity. It teaches that laws are there to be
broken because the only rule that counts tells you to fulfill your desire. If the
rules prevent you from realizing your desire, you must disobey them.